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Option strategies

Option strategies allow traders to limit their risk and maximize their return, while controlling more positions for less money than trading stocks. They also allow traders to profit in any type of market – upward downward, or neutral.

An option strategy involves the buy (and/or sell) of one or more option types (calls or puts) – usually simultaneously - which allows a trader to potentially profit from an underlying stock’s price movements or stagnant state.

In the following pages, we’ll describe each strategy, including the benefits and downsides, using detailed examples:

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